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US Subsidizing Domestic Lithium Production

The US Department of Energy will be providing a $28.4 million grant to expand the Silver Peak lithium production facility operated by the Chemetall Foote subsidiary of Rockwood Holdings. The funding grant represents 50 percent of the estimated project development upgrading costs.

The US Department of Energy ( DOE) will be providing a $28.4 million grant to expand the Silver Peak lithium production facility operated by the Chemetall Foote subsidiary of Rockwood Holdings (NYSE: ROC). The funding grant represents 50 percent of the estimated project development upgrading costs.

The DOE grant is partially being used to install a geothermal power plant which the company expects will make the operation self-sufficient for electric power. The company believes that the reduced energy costs will increase the global competitiveness of the operation and that the combination of solar and geothermal energy should supply more than 98 percent of the energy requirements at the site. In the next few months the project expectations include the addition of a well drilling program that will double the capacity of its lithium carbonate production.

The Silver Peak plant, which is currently the only operating domestic lithium resource in the US, extracts lithium salts by brine evaporation in the Clayton Valley. The brine is pumped from salt-rich aquifers beneath the desert and evaporated in large ponds on the desert surface. The concentrated brine is then pumped to a production plant where it is converted into lithium carbonate, the basic raw material for lithium compounds.

Lithium investors will already be aware that there is growing consensus that energy storage is the next big investment opportunity because cost-efficient storage can significantly improve the profit potential and reliability of every alternative power technology. While some observers remain critical of potential system costs and safety risks, this most recent grant from the DOE to Rockwood seems to underscore a bullish investment thesis and indicates a further commitment to clean technology and alternative fuel sources that the current administration is demonstrating.

World's Largest Lithium Iron Phosphate Plant to be Built in Quebec

Sud-Chemie AG (ETR: SUC) , a specialty chemical company based in Germany, has announced plans to invest $80 million for the construction of a new production facility in southern Quebec, to make lithium iron phosphate used in electric vehicle battery technology. Michel Parent, Director of Sales and marketing for Phostech Lithium was extremely optimistic about the recent announcement, “This will revolutionize the market for batteries”.

The German group is constructing the first industrial production plant for lithium iron phosphate using a new, proprietary production process based-on wet chemistry, on the site of its wholly-owned Canadian subsidiary, Phostech Lithium Inc. Performance, cost, chemistry and safety characteristics vary across lithium ion battery types. Depending on the selection of materials, the voltage, capacity, life, and safety of lithium ion batteries can range significantly. Efforts in lithium ion battery research have focused on nanotechnologies with improvement in both capacity and rate characteristics. The capacity of the battery to store energy can be improved through the ability to insert/extract more lithium ions from the electrode.

The company plans on launching commercial production in 2012, with sufficient output to supply batteries for 50,000 completely electric automobiles, or 500,000 electric hybrids vehicles on an annual basis.

Quebec is quickly making a compelling case to be considered as a primary location for global investment and industrial production, as it has already established itself as the number one jurisdiction for mining by the Fraser Institute annual survey based on how mineral endowment and public policy factors, such as taxation and regulation, affect mining and exploration investment.

Earlier this year, Hydro-Québec partnered with Mitsubishi Motor Sales of Canada and the city of Boucherville, Que., on the largest pilot project in Canada testing electric vehicles in practical driving situations. The $4.5 million test will use 50 Mitsubishi i-Miev cars, starting this fall.

The utility has also entered into a memorandum of understanding (MOU) with Nissan (PINK: NSANY), the Government of Québec, the City of Montréal, Québec City, and the Agence de l'efficacité énergétique du Québec to advance zero-emission mobility in Québec. The objective of this strategic allegiance is to work together to plan the necessary charging infrastructure and to promote the use of zero-emission vehicles in Québec.